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Deadbeats Should Answer to Government, not Gaming Industry

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Publication

Nevada Washington Watch

Written By

Frank J. Fahrenkopf, Jr.

Since the American Gaming Association (AGA) was created in 1995, we have always worked to avoid unnecessary burdens on our industry imposed by the federal government. Recently we were threatened with a proposal that would make gaming businesses check a federal register of child-support offenders before paying out large jackpots—a plan proponents say would help the government collect $700 million from deadbeat parents over five years.

The “deadbeat dads” proposal involving our industry didn’t last long. Due in large part to the Nevada congressional delegation’s involvement—writing letters, testifying about the issue and other efforts to stall the proposal—a provision to address child-support shortfalls by seizing gaming winnings from delinquent parents was removed from H.R. 4, the Personal Responsibility Work and Family Protection Act of 2003. The rejected proposal stated that each time an individual’s winnings triggered completion of an IRS W2G form, employees of gaming establishments, including casinos, horse and dog tracks, and locations where jai alai and keno are played, would be required to check a federal database to determine if the customer owed child support. If the winner did owe child support, the gaming business would have to deduct the overdue amount, plus a fee, from the customer’s payout before turning over any remaining winnings.

The AGA strongly condemns any efforts to avoid child-support payments, but the idea of casinos acting as police officers to collect a fraction of the estimated $89 billion owed by deadbeat parents raises serious issues of privacy and due process, among other flaws.

The “deadbeat dads” proposal has a noble mission, but casinos and other gaming establishments should not bear responsibilities historically handled by the public sector. The plan would have created a new federal bureaucracy to process this information and increased the possibility for mistakes. While lotteries are required to deduct child support from any winnings paid to offenders, these operations are run by the states, which are responsible for law enforcement and already maintain “deadbeat dads” lists—technology that would cost taxpayers approximately $40 million to share with the gaming industry.

Singling out one industry—gaming—as the arm of “deadbeat dads” law enforcement also sets a dangerous precedent for other cash dispensing industries. For example, should banks check the “deadbeat dads” database before they allow customers to withdraw money from their accounts? Or, should investment firms be required to scour their list of customers before updating portfolios or paying out dividends?

This isn’t the first time the president has considered the idea of using our businesses for child-support enforcement. The Bush administration included the “deadbeat dads” provision in its last two budget proposals. In both attempts, the language met opposition from congressional budget writers and was eliminated. The Clinton administration was the first to float the “deadbeat dads” proposal in 1994 as part of a more comprehensive plan to finance welfare reform with a 4 percent tax on gross gaming revenues. The tax threat, along with the “deadbeat dads” provision, soon disappeared. Six years later, the Clinton administration made another push for legislation, embedding the provision in its 2001 budget proposal. Again, the plan was eliminated from the budget.

Some commercial casino states have considered similar tactics to address “deadbeat dads,” with similar results. Missouri was the first in 1997, when gaming regulators proposed that the state’s riverboat casinos withhold jackpots from parents who owed back child support. Last year, riverboat casinos, racetracks and the one land-based casino in Louisiana were threatened with child-support policing responsibilities. Both state bills failed. In Indiana, state legislators this year considered a “deadbeat dads” proposal targeting casino winnings, and it too did not pass.

I applaud our national leaders as well as state legislatures for taking steps to eliminate the massive child-support debt in this country. It’s about time deadbeat dads and moms are encouraged, or at times forced, to take responsibility for their families and pay the support they owe. However, the onus should not be on our industry or any private businesses, but on the pre-established state and federal government entities charged with maintaining the child-support system and enforcing its laws.